FX.co ★ Dominican Republic Holds Interest Rate at 5.75%

In its July 2025 meeting, the Central Bank of the Dominican Republic held its benchmark interest rate steady at 5.75% for the seventh straight month. This decision comes amidst ongoing global uncertainty, which, although somewhat diminishing due to recent US trade-tariff agreements, persists alongside strained international financing conditions. On the domestic front, the liquidity-provision program initiated in June, amounting to RD$ 81 billion (with RD$ 40 billion disbursed so far), is anticipated to enhance private-sector credit as the effects of monetary policy begin to manifest. Notably, annual headline inflation decreased to 3.56% in June from 3.84% in May, and core inflation slowed to 4.15% from 4.22%, both comfortably within the target range of 4.0% ± 1.0%. Economic activity remained robust; the IMAE urban index posted a 2.4% growth on a year-to-date basis through June, driven by sectors such as agriculture, mining, manufacturing (both local and within free zones), and services. Moreover, private credit witnessed an increase of over 8% in July. The Central Bank projects that both headline and core inflation will continue to align with their targets through 2026.